> ## Documentation Index > Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt > Use this file to discover all available pages before exploring further. # PC vs PLLC vs PA (vs corp vs LLC) > What makes an entity 'professional', how PCs, PLLCs, and PAs differ mechanically and for tax, what liability protection they do and don't provide, and why your state dictates the choice. A **professional entity**, a professional corporation (PC), professional limited liability company (PLLC), or professional association (PA), is a business entity whose ownership is restricted to licensees of a specified profession and whose purpose is limited to rendering that profession's services. Which form you use is dictated by your state and your profession far more than by preference. ## What makes an entity "professional" Four features, present in some combination in every state's professional entity statute: 1. **Licensee ownership.** Owners must hold a license in the profession. Some states extend this to directors and officers. 2. **Purpose limitation.** The entity may render only the specified professional service and activities ancillary to it. 3. **Name requirements.** A designator ("P.C.", "PLLC", "P.A."), and often constraints on the name itself or board approval of a trade name. 4. **Professional responsibility preserved.** The entity form does not shield the individual from liability for their own professional negligence. ## The three forms compared | | PC | PLLC | PA | | ----------------------- | --------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------- | | **Underlying form** | Corporation | Limited liability company | Association / corporation, state-specific | | **Ownership unit** | Shares of stock | Membership interests | Shares or membership, state-specific | | **Governance** | Board of directors, officers | Members or managers | State-specific; often corporate-like | | **Default federal tax** | C-corporation | Partnership or disregarded entity | Depends on the form and elections | | **Common elections** | S-corporation | S-corporation or corporate | S-corporation | | **Formality burden** | Highest, bylaws, minutes, board consents | Lower, operating agreement | Moderate | | **Where you'll see it** | The default in most states; required for medicine in California | Widely available; **not** available for medicine in some states including California | Texas physicians; some Florida practices | ### PC, professional corporation The most common form and the one this wiki uses as the default. Created by state professional corporation acts, governed like an ordinary corporation with the professional restrictions layered on. **Key tax note:** a PC taxed as a C-corporation that meets the definition of a **personal service corporation** is subject to a flat 21% federal rate on taxable income under IRC § 11(b), with no graduated bracket structure.1 This is why many PCs elect S-corporation status so income passes through to the owner. Whether that's right depends on the clinician's overall position, a question for a CPA, not a template. ### PLLC, professional limited liability company An LLC with professional restrictions. Lighter governance and pass-through taxation by default, which suits many practices. **The catch:** availability varies. Several states do not permit PLLCs for the practice of medicine specifically. California is the significant example — medical practices there use professional corporations under the Moscone-Knox Professional Corporation Act. Some states permit PLLCs for some professions and not others. ### PA, professional association A distinct statutory form used in a smaller number of states. **Texas** physicians commonly organize as PAs, and **Florida** uses the form as well. Mechanically it varies by state; in practice it functions similarly to a PC with state-specific differences in formation, governance, and naming. Do not assume a PA is available or appropriate outside the states that use it. See [Form a professional association](/guides/formation/form-a-pa). ## What liability protection you actually get This is the most misunderstood aspect of professional entities. | Liability type | Does the entity shield you? | | ------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | | **Your own professional negligence** | ❌ **No.** Never. You are personally liable for your own malpractice regardless of entity form. | | Another clinician's malpractice (vicarious) | ✅ Generally yes, as an owner, but not if you supervised negligently | | Commercial liabilities, leases, vendor contracts, loans | ✅ Yes, absent a personal guarantee | | Employment claims | ✅ Generally yes | | Slip-and-fall and general premises liability | ✅ Yes | | Debts you personally guaranteed | ❌ No | **Malpractice insurance, not entity form, is your protection against clinical liability.** Every professional entity statute preserves individual liability for the licensee's own professional acts — that is a defining feature of the form, not a gap in it. The entity protects you from *commercial* liability and from *other people's* malpractice. ## The ordinary forms, for the MSO The MSO is a normal business entity with no professional restrictions: | | LLC | C-corporation | | ------------------------ | -------------------------- | --------------------------------------------- | | **Ownership** | Anyone | Anyone | | **Tax** | Pass-through by default | Entity-level tax | | **Investor familiarity** | Good for early/angel | Required by most institutional VCs eventually | | **Equity compensation** | Profits interests, awkward | Stock options, standard | | **Typical choice** | Delaware LLC at formation | Delaware C-corp at or before a priced round | Most MSOs start as Delaware LLCs and convert. See [Form the MSO](/start/zero-to-paid/form-the-mso). ## Entity availability by profession, illustrative This table shows the *pattern*, not a reliable lookup. Confirm against your state's page and with counsel. | State | Medicine | Dentistry | Notes | | ---------- | --------------------------------- | ---------- | ----------------------------------------------------------------------------------- | | California | PC only | PC | PLLC not available for medicine; Moscone-Knox governs | | Texas | PA or PLLC | PC/PLLC | PAs common for physicians; nonprofit health organizations under Occ. Code § 162.001 | | New York | PC or PLLC | PC or PLLC | Education Department reviews professional entity filings | | Florida | PA or PC, or clinic license route | PA/PC | Health Care Clinic Act offers an alternative architecture | | Colorado | PC, LLC, or LLP | PC | Comparatively flexible | | Illinois | PC or PLLC | PC | Medical Corporation Act; *Berlin* hospital exception | Full detail per state: [CPOM by state](/reference/legal/states/california). ## The punchline **Your state and your profession dictate the choice far more than your preferences do.** The realistic decision sequence: 1. What forms does my state permit for **my profession**? Often only one. 2. If more than one, which has lighter governance? Usually the PLLC. 3. What does the tax analysis say? Ask a CPA. 4. Does my state require board pre-approval for any of them? Founders arriving from tech expect this to be a strategic choice like Delaware-versus-home-state. It usually isn't. See [Step 1: Pick your state and entity types](/start/zero-to-paid/pick-your-state-and-entity). ## Sources 1. IRC § 11(b) (flat 21% rate applicable to corporations, including personal service corporations, which have no graduated bracket benefit). Confirm current treatment with a CPA. [26 U.S.C. § 11](https://www.law.cornell.edu/uscode/text/26/11). ## Related topics - [Form a professional corporation](/guides/formation/form-a-pc.md) - [Form a PLLC](/guides/formation/form-a-pllc.md) - [Form a professional association (PA)](/guides/formation/form-a-pa.md) - [Who can own a professional entity](/concepts/entities/who-can-own-what.md) - [Why multi-state groups have one PC per state](/concepts/entities/one-pc-per-state.md)